The U.S. Securities and Exchange Commission has ended its lengthy lawsuit against Ripple Labs, marking a significant event for the company and the crypto industry at large.
The SEC’s Case Against Ripple
The legal saga began in December 2020 when the SEC filed a lawsuit accusing Ripple Labs and its executives of raising $1.3 billion through the unregistered sale of XRP tokens. These were classified by the agency as unregistered securities. This lawsuit was viewed as one of the first major legal attacks on a crypto company in the U.S.
A Long and Costly Legal Battle
According to Garlinghouse, the company spent more than $150 million in legal fees fighting the SEC’s claims. The protracted case involved the possibility of a $125 million fine and considerable restrictions on the sale of XRP. Despite these challenges, Ripple secured a partial victory in July 2023 when a U.S. District Court judge ruled that XRP was not a security in retail transactions.
Political Ties and Influence
Reports indicate that Garlinghouse and Ripple's executives have been significant financial backers of U.S. political campaigns, including a $5 million donation to Trump's inauguration committee. These political connections have led to speculation about the role they may have played in the SEC’s decision to drop the lawsuit.
The SEC’s decision to drop the lawsuit against Ripple signals a potential shift in regulatory approaches to digital assets, which could impact the entire crypto industry.
